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Maryland adopts rule establishing community solar pilot program


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Maryland adopts rule establishing community solar pilot program

A regulation establishing a community solar pilot program inMaryland was formally published in the Maryland Register on July 8.The regulation, Community Solar Energy Generation Systems, requires electricsuppliers to administer and accept applications from customers interested inpurchasing power from community solar systems.

This type of system allows renters and residential andcommercial customers who do not have suitable rooftops to purchase a share ofthe energy from projects located offsite. Some examples of community solarprojects include renters who purchase a share of the energy produced from abuilding owner's rooftop system, or a group of residents who purchase a shareof the energy produced from a project located within its community.

Electric companies must start accepting applications fromcustomers interested in purchasing community solar within six months of therule taking effect, or when the company is first notified by a developer orthird party of its plans to own or operate a community solar project.

The regulation requires electric suppliers to creditsubscribers for excess generation based on their share of ownership via abilling mechanism known as virtual net metering. Net metering, in general,allows a rooftop solar owner to sell back unused power to their electricdistribution company. Virtual net metering allows an individual or group ofcustomers to receive credits, proportional to their share of ownership, from asystem located offsite if that system and its subscribers are located withinthe same service territory.

The pilot program is designed to offset the state's peakpower demand and is capped at 1.5% of the state's 2015 peak load, which equatesto more than 200 MW, according to a June 15 Maryland Public Service Commissionnews release.

In addition, the program sets annual caps to stagger theachievement of the 1.5% cap. The first and second years are each capped at 0.6%of Maryland's 2015 peak load. The last year is capped at 0.3%.

Each year, the cap can be met with systems that fit certainprogram categories. Thirty percent of each year's cap is allotted to smallprojects sized at 500 kW or less per system. In addition to small projects, thiscategory also includes solar built on parking structures or previouslydeveloped land known as brownfields.

Another 40% of each year's cap must come from an "open"category that includes projects up to 2 MW in size per system. The remaining30% of each year's cap must come from projects that provide more than 30% oftheir output to customers qualified as low- and moderate-income.

The final regulation was adopted by the PSC on June 14 with minor changes fromthe version proposed for adoption on April 29, according to the July 8notice of final action.

One of the text changes in the final rule clarifiedthat a subscriber may not purchase an amount of energy that is more than doubleits baseline annual electric use, instead of its annual baseline.

The regulation takes effect on July 18, and electriccompanies must file compliance plans within 45 days.

The PSC designed the community solar pilot program inresponse to legislation that Republican Gov. Larry Hogan signed into law on May12, 2015. The legislature identified community solar systems as providingcustomers who lease property access to local energy while the payments fromsubscriptions encourage private investment in solar resources.

The legislature tasked the PSC with adopting regulationsestablishing a pilot program by May 15, 2016, that would allow all customerclasses to participate.